The Great Investors - Sam Altman: The Startup Whisperer
Hello investors, welcome to my Substack, where I study the best investors and businesses from around the world. In this week’s article, we’ll go over the wildly successful Y-Combinator president and CEO of OpenAI, Sam Altman and his advice on how to be successful.
This article will cover the following two topics:
The life of Sam Altman and the growth of Y-Combinator
His tips on how to be successful for a startup
The life of Sam Altman and the growth of Y-Combinator (YC)
The field of entrepreneurship is like a roller coaster ride, and the many personalities mean there are many interesting stories out there, often filled with struggle and desire to reach their goals.
Link - Roller coaster
And it's the same for Sam Altman, but with a twist. Sam is an American entrepreneur, investor, programmer, and blogger. He is currently the CEO of OpenAI, and was the former president of Y-Combinator (YC).
Link - Sam Altman
Open AI - logo
It’s not really a surprise that Sam Altman is a successful investor after his investments in Airbnb, Stripe, Reddit (which he was the CEO of for 8 days), Asana, Pinterest, Teespring, Zenefits, FarmLogs, Shoptiques and more.
When Altman was just 19, he founded a location-based social networking company called Loopt, which later sold to Green Dot for $43 million, with the help of YC. Since then, he’s become known for being a notable entrepreneur and venture capitalist who has been recognized in Inc. magazine's Top 30 Entrepreneurs Under 30 and Businessweek's Tech's Best Entrepreneurs.
When you’ve climbed up the ladder of success at such a young age, as Altman did, it’s only normal for people to wonder how you’ve achieved such success. Some believe that the reason for YC ‘s success is the power of its network. Alumni view themselves as a kind of network of interlocking companies that help one another succeed. “YC is its own economy,” Harj Taggar, the co-founder of Triplebyte, said. Every spring, founders gather at Camp YC, in a forest north of San Francisco, just to network.
In addition to leading YC, Altman had also teamed up with Elon Musk to create a nonprofit venture called OpenAI, a research lab that keeps large governments and corporations and their potentially oppressive uses of artificial intelligence in check. Although recently Musk had to step away from the company due to conflicts with Tesla’s AI program, the goals for the company are the same.
OpenAI’s immediate goals include a household robot able to set and clear a table. One longer-term goal is to build a general A.I. system that can pass the Turing test, which means that it could convince people that it is a human being. Yet Altman believes that a true general A.I. should do more - he believes that it should create, discover, or devise a new form of art simply to gratify its desires to know and to create. In the eyes of many, Sam Altman is already seen as a success story.
In his book, “Startup Playbook,” Sam delves into his tips for success, and answers questions such as: What products should I build? How do you become successful?
According to Sam, you should create a product so good that people want to share the story about it with their friends. He also believes that the most successful companies like Google, Facebook, and Twitter are popular largely because of their popularity. And they became popular when their users described the company’s services to their friends. In his book, Sam Altman also argues that the quality of your product, meaning it should be easy to use, can determine the future of your company. Another important tip he has is to try and aim for a market that is starting to undergo exponential growth.
Trends are also an important factor that can determine the popularity and future of your company, so it’s important to make sure that the trend your company follows is not temporary!
It’s clear to see why Sam Altman, who has achieved so much at his young age, is held in high regard in the fields of finance and investing. We’ll now take a look at the blog post he wrote which outlines his top 13 tips for finding success.
How To Be Successful
Sam has 13 thoughts about how to achieve outlier success.
1. Compound yourself
He believes that exponential curves are the key to wealth generation. For example, a medium-sized business that grows 50% in value every year becomes huge in a very short amount of time. This scalability is crucial!
You should also be an exponential curve yourself by aiming to increase your up-and-to-the-right trajectory. For instance, you don't want a career where people who have been doing it for two years are just as effective as people who have been doing it for twenty. As you progress, each unit of work should generate more and more results. To do this, leverage capital, technology, brand, and network effects.
It’s also alright to take as much time as needed between projects, but just make sure that project is successful. To do this, you need to think in the long-term, and the market will reward you.
2. Have almost too much self-belief
Sam believes that self-belief is powerful, and says that some of the most successful people around him believe in themselves almost to the point of delusion.
If you don’t believe in yourself, it’s hard to let yourself have hopeful ideas about the future, and that is how most value gets created. And unfortunately, the more ambitious you are, the more the world will try to tear you down.
However, self-belief must also be balanced with self-awareness. Always try to listen to criticism, and then decide whether to act on it or not. While this can be hard, it’s what separates self-belief from self-delusion.
3. Learn to think independently
Entrepreneurship is hard to teach because original thinking is hard to teach.
Generating new ideas can be fun, and finding people to exchange ideas can help you get better at this. The next step is to find ways to test these ideas in the real world.
To be successful, you need to figure out what you can do in situations that seem to have no solution. This generates grit, and it will become easier to get back up after you get knocked down.
4. Get good at “sales”
Believing in yourself alone is not sufficient enough —you also have to convince other people that what you believe is true and right. This requires an inspiring vision, strong communication skills, charisma, and evidence of execution ability.
Becoming a good communicator is a worthy investment. Sam’s best advice is to ensure your thinking is clear and then use plain, concise language.
It’s also important to genuinely believe in what you’re selling. While many people treat this as something unlearnable, you can practice and get better at it.
5. Make it easy to take risks
Taking risks is important because it helps you learn to adapt to mistakes, as not every risk will reward you.
It’s usually easier to make risky decisions earlier in your career because you have less to lose and potentially more to gain. When starting, make small bets where you lose 1x if you’re wrong but make 100x if it works, then work from there. It’s also easier to take risks if you keep your life cheap and flexible for as long as you can.
6. Focus
Everybody can benefit from spending more time thinking about what to focus on. It is more important to work on the right thing than it is to work many hours on anything. Most people waste a lot of time on things that don’t matter.
Once you have figured out what to do, get your priorities accomplished quickly. Sam states that he has “yet to meet a slow-moving person who is very successful.”
7. Work hard
Becoming a success requires working both smart and hard, and your stamina to work hard is a predictor of long-term success.
While working hard can come with life trade-offs, it also has a lot of advantages. Not to mention Sam believes that it can also be really fun. It’s joyous to find your life purpose, excel at it, and discover that your impact matters.
It’s also important not to burn out, though. It helps to find work you enjoy doing with people you also like spending a lot of time with.
According to Sam, a pro-tip is to work the hardest at the start of your career. Hard work compounds over time, so the earlier you start, the more time you have for the benefits to pay off.
8. Be bold
Sam believes it’s easier to work on a difficult startup than an easy one, because people want to be part of something exciting. Let yourself become more ambitious, and don’t be afraid to work on what you really want to work on.
Follow your curiosity, because things that seem exciting to you will often seem exciting to other people too.
9. Be willful
People have an enormous ability to make things happen, but often self-doubt and not pushing hard enough prevents most people from reaching their goals.
Ask for what you want. It won’t always work, but it can surprisingly often. If you’re persistent, luck will eventually go your way.
However, to be willful, you also have to have optimism, which can be improved with practice. Most successful people are not pessimistic.
10. Be hard to compete with
Companies tend to be more valuable if they are difficult to compete with, but this also holds true for individuals. If what you’re doing can be done by someone else, it eventually will be, and for less money. Also, if you’re just doing the same thing everyone else is doing, you will not be hard to compete with.
The best way to become hard to compete with is to build leverage through personal relationships, having a strong personal brand, or by getting good at the skills in between the intersection of different fields.
11. Build a network
Great work requires teamwork, and developing a network of talented people you can work with is important for a great career.
A good way to build your network is to help people as much as you can. This can lead to some of your best career opportunities. To do this, try to develop a reputation of taking really good care of the people who work with you, and to be overly generous. It’s also helpful to do your best to ensure that the people you work with succeed by putting them into the roles that suit them best.
When working with others, still try to stand out by highlighting your strengths. Acknowledge your weaknesses, but figure out a way to work around them so they don’t hold you back. The good way to make up for your weaknesses is to hire complementary team members that shine in areas you may lack.
Finally, remember to spend your time with positive people who support your goals and dreams.
12. You get rich by owning things
Sam believes that the biggest economic misconception is that people get rich from high salaries. While there are some exceptions, almost no one who has ever been on the Forbes list has gotten there with a salary.
Instead, you get rich by owning things that increase rapidly in value, such as a piece of a business, real estate, natural resources, or intellectual property. Some way or another, you need to own equity in something, instead of just selling your time.
13. Be internally driven
Most people are driven by external forces, such as by the desire to impress other people. This is bad for many reasons.
First, you will care a lot about whether people think you’re doing the right thing, which can prevent you from doing the interesting work you’re truly passionate about.
Second, you’ll probably get your risk calculations wrong by being focused on keeping up with other people.
The most successful Sam knows are internally driven by doing what they do in order to impress themselves and because they want to impact the world. You’ll also continue to drive high levels of performance after you’ve made enough money to buy whatever you want and get the social status you’ve always wanted.
As Sam believes, “Eventually, you will define your success by performing excellent work in areas that are important to you. It is hard to be wildly successful at anything you aren’t obsessed with.”
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